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By Maricel E. Burgonio, Reporter
THE country’s money supply grew at a slower
pace last February due to weaker capital inflows and a reduction in
the government’s foreign borrowings, according to the Bangko
Sentral ng Pilipinas (BSP).
In a statement, BSP Deputy Gov. Armando Suratos
said domestic liquidity or M3 rose 6.6 percent from February last
year, slowing down from the 7.2 percent increase seen in the first
month this year.
The amount of money in the local financial
system stood at P3.042 trillion in February from P3.031 trillion the
month before. M3 consists of peso savings, time deposits, or
quasi-money and deposit substitutes.
Overseas Filipino workers’ (OFW) remittances
remain a stable source of foreign exchange inflows but risk aversion
brought about by the US subprime crisis tempered the rise of capital
flows.
The decline in liquidity was reflected in the
drop in net domestic and foreign assets, with the former falling to
P2.228 trillion in February compared with P2.283 trillion in the
previous month. This was the seventh consecutive month of decline
for domestic assets, Suratos said.
Credit extended to the private sector expanded
10.1 percent to P2.074 trillion while those granted to the public
sector rose 11.6 percent to P1.081 trillion, as lending to the
national government and local government units (LGUs) picked up.
Net claims on the national government grew 11.5
percent to P827.844 billion, but those on LGUs and other public
entities declined by 4.5 percent to P253.631 billion.
Claims on the private sector reached P2.074
trillion, or same as in January.
The BSP monitors liquidity growth as it impacts
on inflation, with a growing money supply signaling a rise in
average prices.
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